According to a report by Kuaitech on August 19th， the sudden re-authorization of sales for Nvidia’s H20 chip to China after a four-month ban appears to be a calculated move by the United States.
Previously， during an interview， former President Trump stated that he had directed Nvidia to impose a 15% revenue share as a licensing fee on its chips sold to China.
Trump further disclosed that his initial demand was for a 20% fee， but it was reduced to 15% following negotiations with Nvidia CEO Jensen Huang.
Regarding the decision to resume sales to China， Trump candidly remarked that the H20 is “essentially an older chip” and its performance is considered “outdated.”
Analysts suggest that Nvidia likely possesses the capability to pass on these costs to Chinese customers by increasing the price of the H20 by approximately 18%. While this would lead to a slight decrease in gross profit margin， the overall impact is expected to be manageable.
Gene Munster， co-founder of Deepwater Asset Management， believes that Nvidia’s gross profit margin should remain largely unaffected. This is because the company is presumed to be able to transfer the revenue-sharing costs to its Chinese clientele. To maintain its gross profit levels， a price increase of around 18% for the H20 would be necessary.
Wall Street projections indicate that Nvidia’s gross profit margin could reach 71% in 2026. If Nvidia adjusts the H20’s price upwards by 18% to preserve its gross profit amount， the gross margin for the H20 business segment would potentially decrease from 71% to 60%. Assuming the H20 contributes 15% to Nvidia’s total revenue， this adjustment would lead to an overall gross profit margin for Nvidia of 69.3%， down from the projected 71%.
However， some industry experts argue that Munster’s perspective is overly optimistic and fails to acknowledge the current challenging situation for the H20 chip in the Chinese market. Until Nvidia can adequately address concerns regarding the “security” of its AI chips sold in China， state-owned enterprises or private companies involved in government or national security-related business are unlikely to prioritize the procurement of the H20. This， in turn， will inevitably impact the sales performance of the H20 in the Chinese market.
